A 7-Step Plan to Quit Stressing Out About Your Finances

If you’re worried about your finances, you’re not alone. Money has historically been a leading stressor for Americans, according to the American Psychological Association’s annual “Stress in America” survey.

Fortunately, this is one form of stress you can reduce, if not eliminate. And it all starts with taking a close look at the way you use the money you currently have.

The following tactics will help you get control of cash — and quit stressing.

1. Follow the money

pathdoc / Shutterstock.com

According to the FINRA Investor Education Foundation, 19% of U.S. residents spend more than they earn — not counting big-ticket items like new cars or houses. And 23% have past-due medical bills.

Do you have ever-increasing credit card balances and calls from collections agents? Super stressful! Fortunately, you can make two quick changes to pull yourself out of the hole:

  1. Track your spending: Use pen and paper or software like YNAB (short for “You Need A Budget”). At the end of the month, you might be startled to see how much money leaked away on impulse purchases or, yes, those doggone mocha lattes.
  2. Make a budget: It doesn’t have to hurt! YNAB will walk you through the process. Or try the 50/30/20 budget: No more than half of your after-tax income goes toward needs, 30% toward wants and 20% for savings and debt repayment.

2. Know what you owe

Marijus Auruskevicius / Shutterstock.com

Make a list or a spreadsheet of every debt you have:

  • Student loans
  • Mortgage
  • Car payment
  • Credit card balances
  • Child support

Add up the minimum monthly payments — make sure you’re sitting down when you do this — and you’ll have a clear idea of what has to go out each month.

3. Set attainable money goals

Dream big, set goals, take action.
Elizaveta Galitckaia / Shutterstock.com

Maybe your goal is to pay off debt quickly. That’s fine, especially if you are paying bruisingly high interest rates on your credit card balance. For more tips, check out “How to Pay Off $10,000 in Debt Without Breaking a Sweat.”

As soon as you can, though, start to finance your retirement. That means contributing to a 401(k), individual retirement account (IRA) or some other retirement vehicle.

If you’re lucky enough to have an employer match on your 401(k), aim to contribute enough to get the full match, even if you have to start small.

No such benefit at your workplace? Look into IRAs and get going. Automate at least some money each month into one of these accounts, even if you have to start small.

4. Celebrate every victory

Rawpixel.com / Shutterstock.com

Make a monthly money date with yourself — and your spouse or partner, if you have one — to look clearly at your funds. Look at all signs of progress, and celebrate them:

  • “My consumer debt is 15% lower than when I started a few months ago. If I keep going at this rate, I’ll be debt-free within one year.”
  • “My Roth IRA has $1,100 in it — woohoo! This time last year I didn’t even have a Roth IRA.”
  • “Only three more car payments and the vehicle is mine.”

Just remember that “celebrate” is not a euphemism for “blow money mindlessly.” Reward yourself modestly, so you don’t undo all the good you have achieved by changing your spending and saving habits.

5. Create a few long-range goals

Retired friends on the beach
bikeriderlondon / Shutterstock.com

Here’s where the fun starts. Now that you’ve gotten a better grip on your finances, it’s time to blue-sky the rest of your life.

What do you want out of that life?

  • Travel?
  • Entrepreneurship?
  • Buying a house?
  • Raising a family?
  • Retiring early?

Keep in mind, however, that “I want to backpack around the world” shouldn’t come ahead of building an emergency fund or saving for retirement.

Once you’ve identified your goals, take action. For example, clean up your credit so that when you are finally ready to go house shopping, you can get a great mortgage rate.

6. Use technology well

Phone update
sdecoret / Shutterstock.com

The more streamlined your money management, the less stressful your life will be. Use tools like automatic and online bill payment, and you’ll avoid late fees.

Again, tools like YNAB make budgeting easy. That is a type of stress-reliever, too.

Prevent paper clutter by scanning things you need to keep, and shredding everything else. Messy piles of bills and insurance paperwork are stressful. A clean desk is calming.

7. Seek answers to your questions

A young woman reading carefully on her laptop
Rawpixel.com / Shutterstock.com

Maybe it stresses you to hear friends talking about ETFs and IRAs because you haven’t got a clue what they mean. Don’t be ashamed: A lot of people grow up with little to no financial education, either at home or at school.

The internet makes money education easy. Money Talks News, for one, is filled with explanations of the best saving and spending tactics, along with more in-depth discussions on topics such as retirement and investing. Some recommendations:

What are you doing to destress and get your finances under control? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

Never Buy These 12 Things at a Thrift Store
Never Buy These 12 Things at a Thrift Store

Sometimes a great deal is not worth it — or, even worse, is dangerous.

Big-Ticket Things You Should Never Buy
Big-Ticket Things You Should Never Buy

In this week’s podcast: Are you wasting big money on these common purchases?

27 Things You Should Never Pay For — and How to Get Them for Free
27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

7 Hobbies That Help You Live Longer
7 Hobbies That Help You Live Longer

Research shows some hobbies can add years — or even decades — to your life.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.